Credit Market Insights
- The Anatomy of European Systemic Risk

The Eurozone integrity and financial system stability have been under increasingly
severe pressure. In this article, we take a step back from our recurrent markets
focus and try to understand the underlying nature of European systemic risk.
We first describe the monetary and fiscal channels through which systemic risk
has been managed and transferred so far. We then describe the process of
contagion through which systemic risk spreads and propagates. In the Appendix,
we elaborate on some technical aspects of the relatively recent break-up of one
European monetary union and discuss the associated risks in the context of the
present-day Eurozone.